Competant according to whom? Being good at what you do, in business, often has the pleasurable and sought after result of gaining new clients. As a firm offering tax and accountancy services, good means what? Being efficient, always answering the phone, filing on time or even, heaven forbid, giving relevant and money saving advice.
Hang on a second.......did you just say money saving advice, you mean structuring a clients business for maximum profit and lower costs?
Well yes you can do all of that, however, if you ever give advice on any tax matters contrary to HMRC's view of the world you will be deemed incompetent and fined.
If these powers come in, I will immediately change our way of working, hire a group of data imputers, fire all the accountants (unnecessary and expensive) and our slogan will be 'You give us the figures and we will enter them onto the computer'. (Catchy don’t you think?).
I will then sit in my ivory tower and let the masses come to me for my sage 'inputting' knowledge.
Listen to Churchill "We contend that for a nation to try to tax itself into prosperity, Is like a man standing in a bucket and trying to lift himself up by the handle"
The Alternative? Emigration! Your suggestion of FURTHER taxation is exactly the wrong way to go. It is because of unfair taxation (taxing small company operators as akin to employers's PAYE rather than a variant of self employment) that the problem arises in the first place. The small operators we are talking about here are flexible enough to throw in the towl altogether, and either emigrate or look for a contract opportunity overseas which makes them non-resident for a period of time during which historic non-distributed earnings are extracted. Higher levels of PAYE/NI/dividend surcharge may well result in less tax being collected, not more.
If tax levels were fairly set, people would spend less time and effort circumventing the rules and the higher earnings in the hands of more entrepreneurial people would enable investment and growth. The tax take may increase at the same time - do I think the government has the imagination to perceive this? No, sadly not.
Well meaning but ..... "treat you as honest..... Etc", not sure that is in line with current thinking at the coal face of tax collection. A quote from an Inspector at a recent meeting was that it was his mission to "stop HMRC from hemorrhaging money". By the same inspector I was told that about 300 of my clients had been identified as 'questionable' but if I wanted to go back and change their returns no more would be said on the matter. Not the language of even handidness, fair and individual treatment but more like predetermining guilt followed by an atempt at finding the evidence
A belief by HMRC Staff that all tax payers are inherrantly dishonest is sadly not going to be fixed by a well meaning but toothless document.
Coding Notices and Chocolate Fireguards I can certainly agree with the comments concerning the validity of the coding notices. I was asked by a family friend to look at his last four years of returns as HMRC had just asked him for £4k in extra tax.
I re-calculated the numbers and saw that his coding notice only had basic rate tax being due on someone blatantly earning higher rate as his p60 alone had him over the threshold and they knew of his pension drawings.
I managed to get the Rev to drop the claim under EP6601, whereby HMRC have to give up a claim if they failed to make use of information and that the taxpayer reasonably believed everything was in order.
The worrying thing is not the issue of the claim, thankfully my friend had someone he could go to, the problem is the fact that HMRC is taking 'fact' from a form far from reliable.
Procrastination and costs (yours, that is) Eight years after the event????? what is the ICAEW playing at? Non-commercial bodies, especially regulatory ones, have the luxury of time and cost (as they are ultimately passing costs on to their hapless members) which the rest of us do not. Surely the ICAEW have a duty to (i) complete their investigations in a reasonable time - say, 6 months, to minimise stress and worry to those on the receiving end, and (ii) to minimise costs spent on behalf of the defendant. It appears that the principles of responsibility for finances and promptness of action forced on the rest of us by statute, and enforced by the Institute, are cast aside when the Institute itself is involved! No surprise there then - thus has the City (and MP's/MEP's etc etc) always operated. Could I suggest a review of ICAEW's practices and procedures?... perhaps by ACCA??!!
Misuse of existing powers by HMRC In my comment below I was talking of mis-use of power. In my own investigation approx 10 years ago the Revenue embarked on a fishing trip which ended with nothing but technicalities, but refused to close the process. Only a payment of £10K on a "no admissions" basis achieved this - they pointed out I would pay this in accountants fees anyway if I didn't settle. Human Rights? Don't make me laugh. The system is totally adversarial and I'd had enough of sitting up until 1am doing research and answering letters after a 12 hour day at work. At least Dick Turpin had the decency to wear a mask.
who is cheating who? It is all very well to talk about HMRC's stereotype of small business as "careless fiddlers" but what about the stereotype of HMRC as investigating to maximise tax revenue by conducting baseless fishing trips? The reason many small busineses do not practice 100% openness with HMRC is that they do not trust HMRC's motives. Once under an investigation, the business is faced with the burden of cost (non-deductable) and time whilst still trying to run its affairs. HMRC knows this and forces "settlements" by a process akin to blackmail. Light at the end of the tunnel? Only when HMRC introduces fair play into its practices.
My answers
Missing pictures
Hi Martin,
The two you can't see are standard youtube embeds. Can you normally see them on other sites?
AccountingWEB
Competant according to whom?
Being good at what you do, in business, often has the pleasurable and sought after result of gaining new clients. As a firm offering tax and accountancy services, good means what? Being efficient, always answering the phone, filing on time or even, heaven forbid, giving relevant and money saving advice.
Hang on a second.......did you just say money saving advice, you mean structuring a clients business for maximum profit and lower costs?
Well yes you can do all of that, however, if you ever give advice on any tax matters contrary to HMRC's view of the world you will be deemed incompetent and fined.
If these powers come in, I will immediately change our way of working, hire a group of data imputers, fire all the accountants (unnecessary and expensive) and our slogan will be 'You give us the figures and we will enter them onto the computer'. (Catchy don’t you think?).
I will then sit in my ivory tower and let the masses come to me for my sage 'inputting' knowledge.
Listen to Churchill
"We contend that for a nation to try to tax itself into prosperity,
Is like a man standing in a bucket and trying to lift himself up by the handle"
It seems he might have been onto something
The Alternative? Emigration!
Your suggestion of FURTHER taxation is exactly the wrong way to go. It is because of unfair taxation (taxing small company operators as akin to employers's PAYE rather than a variant of self employment) that the problem arises in the first place. The small operators we are talking about here are flexible enough to throw in the towl altogether, and either emigrate or look for a contract opportunity overseas which makes them non-resident for a period of time during which historic non-distributed earnings are extracted. Higher levels of PAYE/NI/dividend surcharge may well result in less tax being collected, not more.
If tax levels were fairly set, people would spend less time and effort circumventing the rules and the higher earnings in the hands of more entrepreneurial people would enable investment and growth. The tax take may increase at the same time - do I think the government has the imagination to perceive this? No, sadly not.
Well meaning but .....
"treat you as honest..... Etc", not sure that is in line with current thinking at the coal face of tax collection. A quote from an Inspector at a recent meeting was that it was his mission to "stop HMRC from hemorrhaging money". By the same inspector I was told that about 300 of my clients had been identified as 'questionable' but if I wanted to go back and change their returns no more would be said on the matter. Not the language of even handidness, fair and individual treatment but more like predetermining guilt followed by an atempt at finding the evidence
A belief by HMRC Staff that all tax payers are inherrantly dishonest is sadly not going to be fixed by a well meaning but toothless document.
Tax Being Given up,
Having just checked HMRC have removed the guidance and have replaced it with PAYE 95045 to 95085.
The bit especially relevant is the 'reasonable belief' section 95080 and the flow chart on the page after which sets out the process.
http://www.hmrc.gov.uk/manuals/pommanual/paye95080.htm
I hope this helps.
Jon
Coding Notices and Chocolate Fireguards
I can certainly agree with the comments concerning the validity of the coding notices. I was asked by a family friend to look at his last four years of returns as HMRC had just asked him for £4k in extra tax.
I re-calculated the numbers and saw that his coding notice only had basic rate tax being due on someone blatantly earning higher rate as his p60 alone had him over the threshold and they knew of his pension drawings.
I managed to get the Rev to drop the claim under EP6601, whereby HMRC have to give up a claim if they failed to make use of information and that the taxpayer reasonably believed everything was in order.
The worrying thing is not the issue of the claim, thankfully my friend had someone he could go to, the problem is the fact that HMRC is taking 'fact' from a form far from reliable.
Procrastination and costs (yours, that is)
Eight years after the event????? what is the ICAEW playing at? Non-commercial bodies, especially regulatory ones, have the luxury of time and cost (as they are ultimately passing costs on to their hapless members) which the rest of us do not. Surely the ICAEW have a duty to (i) complete their investigations in a reasonable time - say, 6 months, to minimise stress and worry to those on the receiving end, and (ii) to minimise costs spent on behalf of the defendant.
It appears that the principles of responsibility for finances and promptness of action forced on the rest of us by statute, and enforced by the Institute, are cast aside when the Institute itself is involved! No surprise there then - thus has the City (and MP's/MEP's etc etc) always operated. Could I suggest a review of ICAEW's practices and procedures?... perhaps by ACCA??!!
Misuse of existing powers by HMRC
In my comment below I was talking of mis-use of power. In my own investigation approx 10 years ago the Revenue embarked on a fishing trip which ended with nothing but technicalities, but refused to close the process. Only a payment of £10K on a "no admissions" basis achieved this - they pointed out I would pay this in accountants fees anyway if I didn't settle. Human Rights? Don't make me laugh. The system is totally adversarial and I'd had enough of sitting up until 1am doing research and answering letters after a 12 hour day at work. At least Dick Turpin had the decency to wear a mask.
who is cheating who?
It is all very well to talk about HMRC's stereotype of small business as "careless fiddlers" but what about the stereotype of HMRC as investigating to maximise tax revenue by conducting baseless fishing trips? The reason many small busineses do not practice 100% openness with HMRC is that they do not trust HMRC's motives. Once under an investigation, the business is faced with the burden of cost (non-deductable) and time whilst still trying to run its affairs. HMRC knows this and forces "settlements" by a process akin to blackmail.
Light at the end of the tunnel? Only when HMRC introduces fair play into its practices.